Money Matters Are Top Of Mind for Multifamily Pros

Money Matters Are Top Of Mind for Multifamily Pros

By Sule Aygoren Carranza | National

MIAMI—Capital—the availability of it, the amount of it and where it’s being placed in the market—was a recurring topic of conversation at the RealShare Apartments East conference on Tuesday. In fact, the first and last panels of the event, which drew some 400 people to the Hyatt Regency Downtown here, focused on debt and equity financing.

The day kicked off with Prudential Mortgage Capital Co. managing director Michael McRoberts chatting with Freddie Mac’s John Cannon and Fannie Mae’s Manuel Menendez. In the “GSE Report: 2012 in Review and the Outlook for 2014,” the execs both related that business and activity is up tremendously for the GSEs’ multifamily arms.

Menendez, senior vice president and head of multifamily customer engagement, said that both loan activity and sizes are up for Fannie for all apartment products across the board, except for seniors housing. In fact, the mortgage giant saw its third largest production year in 2012; yet whereas the prior record years of 2006 and 2007 were driven by large pools, last year’s activity was comprised of mostly one-off, bread-and-butter-type deals. The company also broke the $200-billion mark in its aggregate book of business in the third quarter of last year, with delinquency levels at a mere 28 basis points

Meanwhile, Cannon, Freddie’s senior vice president of multifamily production and sales, related that the company saw $29 billion in production in 2012, up 45% from 2011 and a 110% increase over 2010 volume. About $2.7 billion of that total was in student housing, while the rest was largely traditional multifamily product, which Cannon said was quite “profitable. We like to joke our credit losses were less than our telephone bill.”

The three speakers noted that with investment activity on the rise, fundamentals for lenders continue to be positive. “The market looks ripe to be a great year for debt players,”said McRoberts.

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